At pFriem, Business Symmetry Drives Success

The business of America is business. Cool Calvin Coolidge said something like that nearly a century ago. It was in the middle of Prohibition. He certainly wasn't thinking about beer. But the folks who formed pFriem Family Brewers have taken that notion to heart.

Head brewer Gavin Lord in the new warm room.

A group of media nerds had the pleasure of touring pFriem's soon-to-be open production facility in Cascade Locks over the weekend. The new facility is a crucial cog in the strategic plan that the pFriem brain trust has articulated. Without it, they would be unable to support growth moving forward.

Since it opened in 2012, pFriem has been in an almost constant state of expansion. The Hood River headquarters houses the original 15-barrel brewhouse and they've increased the size of the space several times. This is where they produce the widely popular IPA and Pilsner, the various seasonals, as well as the barrel-aged stuff.

In fact, everything has been produced in Hood River. Last year, that meant something like 140 different beers, all told. Limited space in Hood River has caused logistical challenges. Producing barrel-aged product is a time consuming, space hogging process. Keeping kegs, bottles and cans of the most popular styles requires production and packaging space. Then you need space to store kegs, bottles, cans, grain, hops, as well as product that is conditioning or ready to ship.

For the past several years, pFriem has been leasing space where it stores some the materials it uses in the production and packaging process. They've been forced to navigate logistical hoops involving material storage, as well as warm room conditioning and cold storage in Hood River. It's been a drag on progress and something needed to be done.

Like everything else they do, the 22,000 square foot facility in Cascade Locks was not planned in haste. They started thinking about it three years ago. The idea was that it should be big enough to meet their needs for 4-5 years once open. Besides being obsessed with quality, these guys are meticulous planners. They're well aware of the slowing that's going on in craft beer, also aware that their own numbers continue to grow.

Union Local 541 box

Perusing the new facility, I tracked down founding partner, Rudy Kellner. I asked him if they think the place is big enough to support pFriem's upward trajectory. I asked because I've seen how fast places like this fill up when a brewery is in high growth mode. He told me the facility is actually a bit bigger than they originally envisioned and they feel comfortable. It figures.

They're playing it safe, obviously, knowing full well that it's better to have space you don't need than to need space you don't have. If it winds up being too small in a few years, there's a readily available and buildable lot next door, Kellner said. No stone left unturned.

The new facility will soon house the entire barrel program. There's room for hundreds of barrels and brewers will be able to access and move them fairly easily. A significantly larger warm room (than what they have in Hood River) has garage doors on a long side so stacks of packaged product can be efficiently moved as needed. Ample cold storage, space to stage empty packaging materials and ingredients, as well as a designated Coolship room, complete the picture.

They put a lot of thought into this place. There won't be an official tasting room or pub in Cascade Locks, though they will host an unknown number of special events in an open area near the barrel stacks. I don't know what the area around the facility is going to look like, but it may lend itself to small outdoor fests down the road.

Up until now, pFriem's barrel program has been rumbling along in cramped quarters. The space in Hood River was insufficient to support the robust innovation and production goals of that program. The Cascade Locks facility changes the game completely, allowing for the efficient production of a high value product that's a small, but important part of the business.

Fans who want to tap into those beers may be interested in pFriemsters Union Local 541, which pFriem launched last summer. The club was initially available only to Founding Members, but there are a limited number of spots are available to new members in 2020. Members receive regular allocations of rare pFriem beer, exclusive merchandise, VIP access to events and more. Hubba.

With the space-intensive barrel program gone from Hood River, pFriem will undertake a renovation and expansion program there. The 15-barrel setup will carry on, to be used mainly for smaller batch beers. They'll install a new state-of-the-art brewhouse that's roughly three times the size of the original, which is where the high volume beers will be brewed. Plus, a canning line.

Indeed, the introduction of Pilsner and IPA in cans last year was and is a gigantic home run. Cans account for about a third of of total sales, and helped grow brewing volume by 50 percent in 2019. Although IPA edges Pilsner in can sales, Pilsner is pFriem's best selling beer, a development they would never have predicted back in 2012. They are evidently looking at putting additional styles in cans once the new brewery ramps up.

But beer isn't the only focus at pFriem. Their desire to evolve and expand food offerings at their pub has been thwarted somewhat by the limited size of the kitchen there. That's going to change. The pub will close for several days (Feb. 18-21) to facilitate a kitchen remodel that will grant head chef Justin Congdon and his staff space needed to upgrade their program. The pub will reopen on Feb. 22, just in time for Zwickelmania 2020.

It's worth mentioning that the Ports of Hood River and Cascade Locks have embraced and supported pFriem's mission. Beer is manufacturing and the Gorge welcomes those jobs, as well as businesses that attract year-round clientele from Portland and beyond. The success of pFriem has confirmed the strategic faith the Port of Hood River had in them from the start.

There's an instructive note here. As I've said before, pFriem appears to do a lot of things well. In a maturing industry that is increasingly crowded and competitive, it continues to flourish. There's nothing easy or lucky about it. Lots of places have appeared on the scene in recent years. Some have made good beer. Few have been able to maintain their integrity with scaled growth.

In effect, pFriem is showing us what a successful contemporary craft brewery looks like. They plan and manage for success. The co-founding team of Josh Pfriem, Ken Whiteman and Kellner has navigated a steep growth curve in a challenging industry while maintaining core values of innovation, quality and employee growth. The art of business symmetry.

Transcendent pFriem to Expand Footprint, Production

While much of the beer world is mired in flat or negative growth, there are a few big winners out there. Such is the case with pFriem Family Brewers, which just announced plans that will expand production capacity dramatically.

Details of the expansion were announced at several events this past weekend in Hood River. Since they opened in 2012, pFriem has been gradually increasing the size of its leased space in the Halyard Building on the waterfront in Hood River. Finally, they had to look elsewhere.

Increasing demand for pFriem beer is the reason for the expansion. That's a nice problem to have in this market, where more and more established breweries appear to be at risk. pFriem has actually been a glaring exception. Its annual Oregon production numbers show steady upward growth since it opened in 2012.

The brewery produced 486 barrels that first year, barely a blip in the stats. The projected number for 2018 (the OLCC report showing the full year won't be released until March) is around 13,000. Again, we're talking about barrels produced and sold in Oregon...where pFriem sells most of its beer. Total barrelage for 2018 was nearly 19,000, a company operative told me.

Over the course of the next two years, Pfriem will increase production capacity in Hood River to more than 60,000 barrels. All non-barrel aged beers will be produced and packaged there. Expansion will involve installing a second and significantly larger brewhouse, adding additional fermentation capacity and installing a canning line.

A new facility down the road in Cascade Locks will provide space for them to expand and refine their barrel aging program, which has produced some award winning results, and to also consolidate warehousing and cold storage. For the past few years, pFriem has leased space in Hood River for warehousing and storage. That will go away once the Cascade Locks facility opens.

"The goal has been to increase our offerings, continue to boost quality and innovation and to create opportunities for our employees to further their careers and personal lives in the special communities that we are lucky to be a part of," co-founder and brewmaster, Josh Pfriem said. "We feel that we are on an exciting path to accomplishing these goals through these two interconnected expansion projects.”

Many wonder what plans pFriem has for pub expansion. The Cascade Locks facility will not have a tasting room or pub. That space will be dedicated primarily to expanding the barrel program. The good news for pFriem fans is that they are apparently considering potential pub sites, but have no imminent plans. With pFriem, these things take time.

The recently activated coolship at rest.

As we were finishing up Saturday evening, I had a quick conversation with Josh about the growth trajectory of pFriem. My perspective, free to be challenged, is that pFriem has done what they've done via an intense focus on across-the-board quality. They have a growing list of specialty and core beers that are well-made. The pub in Hood River always provides an excellent experience.

These things do not happen by accident. A lot of people enter this industry every year. There isn't a single one of them that doesn't hope to create memorable beers and unique experiences. Only a handful succeed in doing that. Yet pFriem has done so with apparent ease. It's a fantastic, evolving success story and one that doesn't seem to involve a lot of luck.

Inquiring minds are surely evaluating pFriem's success and wondering how to emulate it elsewhere. The blueprint isn't complicated. It involves an almost fanatical dedication to quality in everything they do. If you can manage that, you can emulate pFriem. So simple.

At pFriem, Reasoned Priorities Drive Success

Since it opened in August 2012, pFriem Family Brewers has built a reputation as one of Oregon's most prolific breweries. Whether you're talking about the best specialty beers, best mainstream beers or best brewpub experience, pFriem seems always to be in the conversation.

Friday evening, pFriem invited a group of media geeks out to the Hood River pub to provide a sort of progress report and hint of what's to come. We enjoyed beers, food and toured the brewery and barrel room. Later, we listened to Josh Pfriem and his associates discuss what they're up to.

Opportunities to casually mingle with industry stars like this don't come crop up all that often. When they do, you almost always expect some kind of major announcement. In this case, some of us wondered if maybe they would announce plans to open a pub in Portland. Or maybe they were launching a few of their beers in cans, the hottest industry trend at the moment, next to hazy IPA. Inquiring minds.

It turns out there are no immediate plans to open a pub in Portland. There isn't any rush because pFriem's Hood River location is already quite popular with Portland consumers. According to Josh Pfriem, something like 70 percent of their Hood River clientele comes from Portland. That's a fascinating statistic, frankly speaking. It means pFriem is a destination.

Think about that for a second. If pFriem were to open at pub in Portland, which would present a number of challenges and risks, the business in Hood River would take a hit. If people from the city are happy coming to you, why should you assume the risk of coming to them? At this point, given the state of the industry, it just doesn't make sense.

The question about cans yielded a similar response. Although they're seriously looking at getting some of their beers in cans, that's not the top priority. We see a number of breweries aggressively moving to cans, yet pFriem is hanging back, content to invest in other areas. My guess is we'll see two or three pFriem beers in cans within a year or so. Time will tell.

One of the most interesting factoids we collected Friday evening is what's driving pFriem's priorities. Josh revealed that their best selling beer is...the Pilsner. Close behind is the IPA. Those two beers account for about 70 percent of their sales. Keeping those pipelines full is a top priority. As such they are expanding fermentation capacity and improving other efficiencies in the brewery. Makes sense.

Of course, pFriem's specialty beer program is well known. It includes a list of mostly spectacular beers. They had just released barrel-aged Nectarine Golden Ale on draft in the pub and we tasted it from bottles after dinner. The beer is a major home run, I think, and will be released to the public this week. Don't miss it.

To advance their barrel and specialty program, pFriem will soon install a Coolship. That will allow them to tap the local, airborne fauna, such as De Garde does in Tillamook and Logsdon has done in Hood River. This is a significant step and I look forward to seeing the results. Just keep in mind that these beers take several years to curate. Patience recommended.

If all goes as planned, pFriem will increase its annual production from 15K barrels in 2017 to 19K barrels this year. Those numbers mean sustained growth in an industry that's getting more competitive virtually by the minute. Staying in that kind of growth mode is becoming increasingly elusive and requires meticulous attention to detail, to say nothing of expertise.

The big story here, it seems to me, is that pFriem has somehow managed to reach and satisfy casual craft beer fans and beer geeks. There aren't many breweries in Oregon or elsewhere that have successfully walked that tightrope. It isn't easy. Pfriem has done it with smarts, integrity and, yeah, probably a little luck. Sometimes, you make you own luck, my dad always said.

These next few years are going to be challenging and interesting at the same time. The cowboy era in craft beer is coming to a close. Success from here on out is going to require the kind of deliberate, well-reasoned approach pFriem has taken and is taking.

I suspect it's going to work out for them. We shall see.

Note: Special thanks to Josh Pfriem, Rudy Kellner, head brewer Gavin Lord, marketing guru Michelle Humphrey, and the other amazing staff who contributed to a splendid evening.